Wild and crazy tax deductions 2013 edition

Finally, lest any installment of our craziest tax tales lack for a working girl story, New Jersey CPA Martin Abo obliges with one he spotted in the U.S. Tax Court files.

In the case of William G. Halby v. Commissioner of Internal Revenue, the court denied an attempt by a retired New York lawyer to claim more than $100,000 in payments to prostitutes and the purchase of pornography as medical expense deductions.

The judge observed, "Petitioner did not visit these prostitutes as part of a course of therapy prescribed by his doctor, nor did petitioner ask his doctor to prescribe any sort of sex therapy."

In his defense, the appellant referenced book and magazine articles about the positive health benefits of sex therapy and argued that he should be allowed a deduction, despite the illegality of his conduct and absence of a prescription for prostitutes.

"I was telling a divorce attorney colleague about this case," Abo recalls, "and she told me that, under that theory, she should be entitled to deduct her Chanel pocketbook for the, uh, satisfaction she receives from owning and carrying such."

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